SHASHANK GARG vs. INCOME TAX OFFICE, AND ANOTHER

Facts

The petitioner, Shashank Garg, filed a writ petition challenging an order dated 01.02.2022 passed by the Commissioner of Income Tax, Range-1, Hissar. This order dismissed the petitioner's application for a stay of demand. The sole ground for dismissal was the non-payment of 20% of the total disputed tax demand. The petitioner sought relief from this order. The respondents, the Income Tax Officer and another authority, were represented by Senior Standing Counsel. The High Court considered previous judgments from the Delhi High Court in similar matters.

Held

The High Court allowed the writ petition. It set aside the orders dated 24.01.2022 and 01.02.2022. The matter was remanded back to the Income Tax Officer (respondent No. 1) to decide the application for stay. The Court directed that the stay application be decided after giving the petitioner an opportunity of hearing, without insisting on the pre-deposit of 20% of the total disputed tax demand. The reasoning was based on the precedents from the Delhi High Court in Tata Teleservices Limited and M/s. Dabur India Limited. The ratio decidendi is that a stay application should not be rejected solely on the ground of non-compliance with the pre-deposit requirement if other factors warrant consideration, and an opportunity of hearing should be provided.

Key Issues

1. Whether the order dated 01.02.2022 passed by the Commissioner of Income Tax, Range-1, Hissar, which dismissed the petitioner's application for stay solely on the ground of non-payment of 20% of the total disputed tax demand, is sustainable in law? Assessee's Contention: The petitioner argued that the dismissal of the stay application on the sole ground of non-payment of 20% of the disputed demand was unsustainable. The petitioner relied on judgments from the Delhi High Court in W.P.(C) 4660/2022 (Tata Teleservices Limited vs. Commissioner of Income Tax) and W.P.(C) 15850/2022 (M/s. Dabur India Limited vs. Commissioner of Income Tax (TDS)). Revenue's Contention: The judgment does not record any specific arguments made by the revenue. However, the revenue was represented by Senior Standing Counsel, who accepted notice.